There are two big differences between a traditional and a direct primary care (DPC) practice:
- The doctor is paid directly by patients, not insurance (or other third-parties)
- The patient doesn’t pay for office visits, instead paying a low monthly fee (typically about $50 per month).
The monthly payment is enabled by the freedom from insurance billing and codes, so the two changes are tied closely together. This article will focus on the ways in which the monthly payment changes the experience for doctors and patients.
First, I want to address certain hybrid practice models and their use of monthly fees. Many “concierge” practices (and even some who label themselves DPC) use the monthly fee in addition to traditional insurance billing. This practice can only legally be done if the monthly fees are for “uncovered services,” those not covered by third party billing codes. While this does give the opportunity for significantly increased revenue, it also increases the risk of double-billing for a single service, which has especially bad repercussions if Medicare or Medicaid are the payer. For those who are considering this approach, I recommend doing so with great care and close counsel from experts. people/companies with significant experience doing this.
The fee itself
The “ideal” patient for a subscription-based practice is one that doesn’t use your services frequently, but also sees value in paying your monthly fee. This is why I set my fees based on age, starting at $30 per month for children, and increasing incrementally by age to a maximum of $75 per month for seniors.
Any practice is much more likely to have frequent visits from a 70-year-old than a 30-year-old. Furthermore, if you set your prices too high for the younger patients, you select against the very patients you are seeking—generally healthy people who need you on occasion. I’ve been satisfied with the income I can generate from my practice with our current fee schedule and with the level of medical need of my patient population. I’ve been able to grow my practice above 750 patients and still not feel overwhelmed, and I have very little loss of patients on a monthly basis.
Financially, one of the greatest benefits of having a practice based on monthly fees is the predictability of revenue. Not only is overall income predictable, but the flow of revenue is steady throughout the month, making cash-flow easy to navigate. While there is no such thing as a “big month” in a subscription practice, neither are there “slow months,” which is a trade I am happy to make. Plus, I’ve twice adjusted my price up by $5 per month, which caused very little loss in patient numbers but generated a substantial gain in revenue (which is nice with kids in college).